optionMONSTER's Depth Charge monitoring program detected the purchase of 6,000 November 28 puts for $1.30 and the sale of an equal number of November 31 calls for $0.40. There was barely any open interest at either strike before the trade appeared, indicating that this is a new combination trade.

The investor paid $0.90 to open the position and has the right to sell shares for $28 through expiration. Because the trader is also on the hook to sell for $31 if they go above that level, the trader probably owns stock in the name and is using the options for protection.

Known as a collar, the strategy is a common hedging mechanism on long positions. The trade was done after ARMH rallied back to the same price area where it had traded in late 2012 and early 2012. The stock peaked around $31 in November, which is probably why it's being targeted as a sale point.

ARMH rose 0.87 percent to $27.97 yesterday and is up 21 percent in the last three months. The chip maker has been trading in a sideways range since early 2011 after a giant rally in the two preceding years.

Overall option volume in the maker of mobile chips was 21 times greater than average in the session, according to the Depth Charge.

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.